Acute injuries to cartilage are common and often result in defects that the body's innate healing response repairs with fibrocartilage. This repair tissue lacks the architecture and mechanical properties of native articular cartilage and most often degenerates over time. Tissue engineering strategies have faced the combined problems of encouraging cell migration, proliferation, chondrogenic differentiation and extracellular matrix (ECM) assembly such that neocartilage is formed and can integrate with the existing cartilage at the wound edges. We propose that engineering a biologically functional 3D-microenvironment for BMSCs within self- assembling peptide hydrogel scaffolds can stimulate chondrogenesis and cartilage neotissue integration in vivo. This peptide scaffold will be functionalized with ECM components and a novel heparin-binding form of IGF-1, which together will be optimized to stimulate chondrogenesis of infiltrating progenitor cells and to enhance integration at the cartilage-neotissue interface. Translation of these functionalized scaffolds developed in vitro to useful cartilage repair in vivo will be tested using both rabbit and equine models. These combined, integrated studies represent a collaboration between scientists and engineers at the Center for Biomedical Engineering, Massachusetts Institute of Technology, and clinical scientists at the Orthopaedic Research Center, Colorado State University. Our Specific Aims are: (1) To develop second-generation KLD peptide nanofiber scaffolds by functionalizing with pro-chondrogenic molecules, including ECM constituents such as collagen types VI/I and heparan sulfate, and a pro-anabolic molecule, heparin binding IGF-1 (HB-IGF-1). We will then test the ability of these optimized acellular peptide scaffolds to promote the chondrogenesis of infiltrating progenitor cells, cartilage neotissue biosynthesis, and cartilage defect repair in a rabbit model in vivo. (2) To test the hypothesis that integration between construct and cartilage in vitro can be optimized through enzyme pre-treatments and peptide scaffold-incorporated HB-IGF-1 + collagen types VI/I; and then to test the hypothesis that integration between construct and cartilage in vivo can be optimized through enzyme pre- treatments and peptide scaffold-incorporated HB-IGF-1 + collagen types VI/I in a rabbit model; and (3) To test the ability of optimized acellular peptide scaffolds to attract progenitor cells and promote chondrogenesis, cartilage neotissue production, and integration with surrounding tissue in an equine model subjected to strenuous exercise.